City Clarifies Canadian Taxpayers Federation Report
Medicine Hat – A report released earlier this week by the Canadian Taxpayer Federation (CTF) showing Medicine Hat as the highest spending big city (over 30,000) on a per capita basis in Alberta has prompted City officials to clarify the approach used in the report.
“The CTF report does not take into consideration the differences between municipalities,” says Dennis Egert, Commissioner of Corporate Services. “It is inappropriate to compare each municipality just based on total costs when each municipality offers different services and amenities and municipalities vary substantially in terms of their participation in revenue generating enterprises that typically have the effect of lowering the burden on taxpayers.”
The amount reported by the CTF is based on the total consolidated expenses for the City of Medicine, which includes revenue generating business units not found in many (or in some cases any) other municipalities. These include power generation, gas and electric distribution, oil & gas production, environmental utilities, and land development. These business units are extensive and the related revenues, costs and net profits are substantial.
Typically, these areas generate net revenue and therefore do not require funding from municipal tax dollars. By removing these units from the consolidated figure reported by CTF, the municipal spend per person is $2,555 in Medicine Hat, much lower than the $6,243 shared in the CTF report and 25% lower than the average of the 30,000+ population cities referenced in the report.
“The City of Medicine Hat is constantly striving to lower costs in providing services to our residents and businesses. It’s also important for residents to understand that our City has invested in first-class facilities, amenities and park areas which enhance the quality of life for our community, such as the Esplanade, Canalta Center, and Echodale Park,” adds Egert. “These assets are possible in large part because of success in our revenue generating units, and they are not typically offered in most municipalities our size.”
A more appropriate measure of a City’s performance for taxpayers is the median tax required for single detached houses to support municipal expenses. By this measure the City of Medicine Hat consistently outperforms virtually all other comparator municipalities as evidenced by the recent 2018 City of Calgary’s comprehensive survey of property taxes (link to full document below graph).
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